Financial Implications on Quality of Care
There are many factors that can influence the quality provided by an organization. Conversely, it can also be be said that the quality of the services of an organization can have an influence over other factors as well. In this module, we look at how quality of care provided by an organization can carry major financial implications; that is, the importance of quality on the finances of an organization.
In Module 4 we talked about how necessary technology is to the quality of health care. The importance on quality, not just quality of care, is just as important to the financial success of a health care organization. Many third-party ...view middle of the document...
Hospital stays, physician office visits, and pharmacy rank among the top spending categories (Buchbinder and Shanks, 2007, pp. 156-157). With all this said, we have to think of the saying "to whom much is given, much is required". That saying can easily be applied to health care as it relates to quality in delivery of services. Health care organizations such as hospitals, physician offices, and other settings will have to produce quality services in order to capitalize on the best rates of reimbursements. As stated earlier, patient outcomes will be the driving force in all of this. The documentation of such outcomes will be crucial to the use of technology, specifically the electronic medical record. Let's take hypertension for example. Payment for services may be based upon how well the organization can control the patient's disease. In some cases, there are benchmarks that have to be met. If a patient has hypertension, a goal may be set to have that patient's blood pressure within a particular parameter and within a given period of time. The health care entity would have to have measures (patient & provider education, treatment practices, policies, etc.) in place to ensure the patient's blood pressure is brought and kept under control. In general, insurance entities such as Medicare and Medicaid want to see optimal results for the services provided by the health care organization. Again, failure to show this could greatly impact the payment for services. It is also important to mention that if an organization is not accredited by the Joint Commission (discussed in Module 3), they are not eligible to receive payment from Medicaid or Medicare (Buchbinder and Shanks, 2007, p. 140). This further reiterates the payer's desire to ensure quality services are provided. We discussed the Joint Commission's role in Module 3 in ensuring quality in an organization. In general, an organization which is accredited not only has the blessing of CMS, but also places itself in a position to recruit higher quality health care providers, who in turn serve as a marketing tool to recruit potential new patients.
The quality of care in an organization can also have many legal implications which can lead to financial implications. As we discussed in Module 1, quality has a lot to do with positive outcomes. Any negative outcomes experienced by the patient can greatly impact the bottom line of the organization. Let's look at safety for example. According to Buchbinder and Shanks (2007, p. 143), the lives of 98,000 patients are lost each year due to safety issues such as medical errors. Events such as these make it more likely for the health care organization to be sued by the patients affected. Obviously, this can greatly impact the organization's bottom line substantially....